When strong buyers have been exhausted, the strategy is obviously to make more loans more readily available to everyone else. So they can pick up where strong buyers left off.
My prediction? In some of the less than stellar areas..Get ready for the next run up in prices. More buyers in the buyer pool.. Hope you folks have a lot of cheap real estate you picked up over the past few years….Enjoy the ride.. 🙂
Don’t worry.. I’m sure subprime lending will be coming back in the future at some point too.
one step at a time people…. one step at a time. You can’t expect them to completely go back to 2002 standard over night. I’m definitely enjoying the ride. Here’s hope for another bubble.
Also, average down payment right now is something over 10% down (I read 20% in SD) depending on area. 5% down (prior to now) and 3% down are theoretical minima, if a bunch of other criteria are met. Those criteria tend to raise real down payment requirements higher.
Anyway, hope the GOP congress puts FHFA’s yarbles in a vise and twists the handle. Hard. Tick-tock-tick-tock. Another month till some … change.
In many markets it’s still cheaper up buy than to rent.
Someone I know in Maryland just bought a house for 3% down on my advice. House is nicer than rental apartment, for the same monthly cash outlay. He has a good job for the federal government.
So as long as there is good underwriting with thorough income verification, I don’t see a bubble.
[quote=spdrun]Sure you can — with a general recession reducing all risk assets 🙂 Basically, if Europe, Russia, China, and energy firms lead the way down.[/quote]If you see a crash, that mean prior to the crash, you were in a bubble. The bigger the bubble, the bigger the crash.
As for your reasons, lets just wait and see. I don’t see it happening. I central banks around the world lowering rates and doing everything they can to keep the party going again.
Can’t lower rates below zero, QE4 is politically improbable at this point (yay for both GOP houses!), oil is crashing, and China is headed for a mess. Seems like the ECB isn’t so keen on QE either.
2001 to 2008 was seven years. It’s been six years since the last mess…
[quote=spdrun]Can’t lower rates below zero, QE4 is politically improbable at this point (yay for both GOP houses!), oil is crashing, and China is headed for a mess. Seems like the ECB isn’t so keen on QE either.
2001 to 2008 was seven years. It’s been six years since the last mess…[/quote]Why did you pick 2001? Housing didn’t crash in 2001. It crashed around 1991.
[quote=spdrun]Housing is shaky as it is. A generalized slowdown affects general confidence and put the brakes on it.
It sure wasn’t growing much around 2001-2. Last time, housing affected everything else. This time, it might be the other way around.[/quote]
But it didn’t crash. It wasn’t event flat. So, why did you pick 2001? I wouldn’t mind if today is like 2001.
